STOCKHOLM (Reuters) - Estonia is investigating allegations linking Swedbank to suspicious transactions in the country involving Danske Bank, Estonia’s state prosecutor said on Wednesday.
Danske is being investigated in its home market of Denmark, Estonia, Britain, France and the United States over some 200 billion euros ($226 billion) in payments from Russia, ex-Soviet states and elsewhere that were found to have flowed through its Estonian branch.
A Swedish television program said it had uncovered documents indicating at least 40 billion Swedish crowns ($4.30 billion) had been transferred between accounts at Swedbank and Danske in the Baltics between 2007 and 2015.
“We can confirm that, as the published information relates to Danske Bank, we are checking out the claims as part of our Danske investigation,” a spokeswoman at Estonia’s state prosecutor’s office said on Wednesday.
The Estonian Financial Supervisory Authority said Danske had not operated in isolation in the financial system and that its transactions necessarily involved banks in other EU countries, not all of which were suspect.
“This does not automatically mean (or exclude) that a bank receiving payments in a possible money laundering operation has committed a crime or has breached the bank’s requirement to know its client and identify suspicious circumstances,” it said in the statement.
Company spokesman Gabriel Francke Rodau said in a statement that fighting money laundering was one of Swedbank’s top priorities.
“We are comfortable with the systems and processes we have to prevent and avert money laundering. When we get signals, we act,” he said.
The statement also said the bank could not comment on all the details in the program as a result of bank secrecy laws and rules preventing it discussing cases it had already reported to authorities.
Shares in the bank were down 11 percent at 1440 GMT.
REPUTATIONAL RISK
Swedish Financial Markets Minister Per Bolund the allegations could damage the reputation of the Swedish banking sector.
He said banks that could not guarantee compliance with money laundering and financing of terrorism rules in high risk countries “should really question whether you should be in that kind of market”.
Swedish mutual insurance group Folksam, Swedbank’s second biggest shareholder with a 7 percent stake, said in a statement it took reports of money laundering “very seriously”.
“Swedbank has made assurances that it has taken strong measures and has reported suspicious transactions to the relevant authorities,” it said.
Swedbank Chief Executive Birgitte Bonnesen has repeatedly said that the bank, the biggest lender in the Baltic countries, has found no ties to Danske Bank or other money-laundering operations in the region.
The Swedish Financial Supervisory Authority said it had no comment on the report at present.
The TV program said that transactions by 50 of Swedbank’s clients should have raised red flags as they were companies with no visible operations, had unknown beneficial owners or were represented by suspected “goalkeepers” - people who only provide a front for an organization.
“The investigation covers more than 1,000 of Swedbank’s clients in high-risk countries who are known from the money laundering scandal in Danske Bank,” broadcaster SVT said on its website.
Danske Bank was ordered on Tuesday by Estonian authorities to shut down its operations in the country within eight months and the bank said it would leave Russia and the Baltics altogether.
Additional reporting by Helena Söderpalm in Stockholm and Tarmo Virki in Tallinn; Editing by Keith Weir
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